Reading Reader's Digest October 2010: your guide to investing, saving & making most of your money.. i think it's better for a fresh graduate who start working to read sonething on managing finance so that your money wont go astray... I own a copy of Graduan which provide useful tips on managing money but i didnt take it seriously before...
For introduction, start by paying yourself first... Saving should constitute at least 10-20% of your salary... Increasing the portion is welcome, the more, the better! It's crucial to separate saving from emergency fund... At least, open fixed saving account and another account for emergency fund.. Expert say, at very least, emergency fund should cover your 3month expense.. When a tragedy strike, emergency fund will be handy & it's the one that will come to your rescue without the need to empty your bank account!
For cashflow, let's divide our basic expenditures into 3 part...
1) fixed expense (things that dont change fronm month to month) - house, insurance or car payment..
2) committed expense (things you are committed to) - phone bills, food, transportation, contribution to parents, utilities payment & so on
3) the rest falls into discretionary expense... Spending on cloting, entertainment or vacation & so on..
The best rule of thumb is 50-30-20 , 50 for fixed & committed expenses..
30% should be discretionary spending & the final 20% goes to saving... It may be daunting to go from barely making ends meet to saving a chunk of your income, but having a plan in place is the first step...
One more thing, you shouldnt touch your saving, make sure save extra penny for car downpayment or happy occasion like marriage because if you use your saving, at the end, you'll feel what a waste of your saving - too little balance left after you withdraw your money, is equal to not saving at all..
& keep your temptation to celebrate your first payment small.. Nothing wrong with celebration, but keep it up to your par
No comments:
Post a Comment